The Director General of GST Intelligence (DGGI) is a key position created under the Goods and Services Tax (GST) regime in India. The DGGI is the topmost authority in charge of intelligence gathering, investigation, and enforcement under the GST law. The Director General of Goods and Services Tax Intelligence (DG GSTI) is a senior official appointed by the Government of India under the Goods and Services Tax (GST) Act.
The main responsibilities of the DGGI are:
1. Intelligence gathering: The DGGI is responsible for gathering intelligence about potential violations of the GST law. This includes collecting information from various sources, such as GST returns, financial statements, and other documents.
2. Investigation: The DGGI has the power to conduct investigations into suspected cases of GST evasion or non-compliance. This may involve summoning persons, examining records, and carrying out searches and seizures.
3. Enforcement: The DGGI is responsible for enforcing the provisions of the GST law. This includes taking legal action against offenders, imposing penalties, and recovering any taxes or duties due.
The DGGI works closely with other agencies, such as the Central Board of Indirect Taxes and Customs (CBIC) and the State GST authorities, to ensure effective implementation of the GST law. The DGGI also plays a key role in creating awareness about GST compliance and educating taxpayers about their obligations under the law.
subsidiary accused for using fake GST invoices to avail ITC of Rs 21 crore
For the past 8-9 months the COVID 19 pandemic has forced India into a lockdown. Most of the countries small businesses which relied on physical availability of customers have had the most hit. Small business revenues have plunged everywhere. Nevertheless, tax evaders have proved to be an exception to this rule, who no matter what the situation persists, find a way to evade tax.
subsidiary Instakart Services are being accused by tax authorities for using fake GST invoices. The ecommerce giant’s subsidiary is said to have illegally availed input tax credit (ITC) worth Rs 21 Cr since July 2017. The undue credit has been availed by the firm on the basis of fake invoices issued by two of its vendors engaged in ‘manpower supply’.
What do you mean by an invoice?
An invoice is basically a bill of the list of goods sent or services provided, along with the amount due for payment. It is a commercial instrument issued by the supplier to the recipient.
What is the importance of an invoice?
- Evidences of supply of goods or services
- A registered person cannot avail input tax credit unless he is in possession of a tax invoice or a debit note.
- Invoice is an important indicator of the time of supply.
What was found in the investigation by GST officials pertaining to Instakart Services?
- The investigation by the GST Intelligence wing concerned the non-payment of GST by two vendors.
- However, while investigating a separate case, the Directorate General of GST Intelligence (DGGI) found that the accused had supplied fake invoices to these two vendors contracted by Instakart, which, in turn, had availed ITC based on invoices issued by these firms.
- After issuing summons to Instakart’s vendors, the DGGI found that these two firms didn’t exist at their given addresses.
- This was followed by summons issued to Instakart to investigate its dealing with these firms which only existed on paper.
Major Fraud Syndicate Involving Fake Firms Busted by DGGI in Jaipur
In an ongoing battle against fraudulent practices, the Directorate General of GST Intelligence (DGGI), Jaipur Zonal Unit, has made a significant breakthrough. The unit successfully exposed a massive Delhi-based crime syndicate, implicating it in a wide-ranging scam involving hundreds of fake firms and fraudulent ITC claims.
The Modus Operandi of the Crime Syndicate
The syndicate’s fraudulent activities were intricately planned. Collaborating closely with various brokers, the group purchased firms, bank accounts, and SIM cards to facilitate their RTGS/cash transfers. Brokers specialized in registering companies on GSTN using the IDs of vulnerable individuals, who then sold these registered firms to the syndicate. The syndicate issued false invoices, resulting in taxable turnovers amounting to Rs. 6,022 crore and leading to the illegal ITC claim of Rs. 1,047 crore.
Scope of the Fraudulent Operations
The fraudulent scheme spanned across 14 states, with the majority of the faux firms operating from Delhi. The syndicate’s vast network included Rajasthan, Uttar Pradesh, Punjab, Bihar, Jharkhand, Gujarat, Maharashtra, Haryana, West Bengal, Karnataka, Goa, Assam, and Uttarakhand. The subsequent investigation resulted in the attachment of 73 bank accounts linked to the syndicate and its brokers.
DGGI Jaipur’s Continued Vigilance against GST Fraud
DGGI Jaipur continues to make significant strides in its mission to curb GST fraud. The unit’s proactive approach has led to the booking of numerous cases involving fraudulent ITC claims, with several key arrests. The committed team is dedicated to discovering and dismantling such syndicates threatening the integrity of GST administration.
FAQs
Q1: How can businesses stay on the right side of the Directorate General?
Transparency and compliance. Keep your financial records squeaky clean, and you won’t be on their radar.
Q2: How does the Directorate General gather intelligence?
It’s a blend of traditional sleuthing and modern technology. From scrutinizing financial records to leveraging data analytics, they employ a multifaceted approach to stay one step ahead.
Q3: What exactly does the Directorate General of GST Intelligence do?
They monitor, investigate, and enforce compliance with GST laws, ensuring a level playing field for all taxpayers.
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